Provident earnings up 44% in 1995 Gain attributed to rise in loans, service fees

January 18, 1996|By Bill Atkinson | Bill Atkinson,SUN STAFF

A surge in consumer loans and income from checking account products pushed Provident Bankshares Corp.'s earnings up 41 percent in the fourth quarter, the company said yesterday.

Provident earned $5.1 million in the fourth quarter and $18 million for the full year -- a 44 percent gain over 1994.

On a per-share basis, Provident made 61 cents for the quarter and $2.20 for the year, compared with 45 cents and $1.72 respectively in 1994.

"It has been an upward trend," said James R. Wallis, Provident's chief financial officer, referring to the once-troubled company's turnaround, which began in 1990. "We expect '96 to be a good year, too."

Provident's stock closed yesterday at $29.75 a share, up $1.25.

The quarterly increase was fueled by an increase in consumer loans and fees customers paid for services on their accounts, Mr. Wallis said.

Average consumer loans outstanding grew $261 million in the quarter to about $750 million, and average commercial business loans grew $10 million, to $190 million, Mr. Wallis said.

The Baltimore-based company's total loans were up 4.8 percent to $1.3 billion for the year.

'Sheer volume'

Provident's loan growth was spurred by gains in second mortgages, home equity lines and indirect auto loans -- made through car dealerships, Mr. Wallis said.

In the quarter, income from products and services increased 34 percent to $9 million, and it was up 7 percent for the year, at $29 million.

"It was the sheer volume of new accounts," ATM fees, and service charges on accounts that drove fee income up, Mr. Wallis said.

Fee income, which many banks are relying upon more heavily to generate profits, was offset for the year by a $2.8 million loss in the second quarter on the sale of mortgage-backed securities, and a decline in sales of mortgage servicing rights.

Provident's nonperforming assets -- loans that are 90 days past due on principal and interest -- increased $1 million in the quarter to $14.8 million.

Provident's assets grew 12.2 percent for the year to $2.5 billion, and deposits were up 8.3 percent to $1.6 billion.

The company's board of directors increased the quarterly cash dividend 1 cent, to 17 cents a share, payable Feb. 9 to shareholders of record Jan. 29.